Low mortgage rates but borrowers should beware of high fees up to £2,500

Amongst the intensifying price war, that bites the profit margins of the mortgage lenders; special concern has been expressed to the borrowers. According to the latest buzz in the industry, a revelation has happened. There are possibilities that the Bank of England may reduce the base rate to 0.5 per cent at the month-end.

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As a result of the chances of fall in the base rate, the market is sure to become extensively complicated. It means the mortgage companies need to be prepared to face a competitive atmosphere. To fight the fear of loss due to this, several lenders try to compensate for the threat of loss, and they try to charge high fee. It adds in the total price of the debt. Have a look here https://bit.ly/2sIpXMT

DESPITE THE HIGH FEE ISSUES following benefits come under the limelight for those, who want to buy their roof –

• Lower rate of interest makes the mortgage deal lighter in repayments.

• First-time homebuyers can apply and avail funds on a lower total cost.

• The prime benefit reaches to the people the credit score flaws. Attaining mortgage for bad credit is not an impossible thing.

• The people with no credit history too can expect their share of financial assistance due to increased competition.

Long-term fixed deals are not best always

With the prevalent wind of cheaper mortgage deals due to the cut of the base rate, people are happy. In such circumstances, the mortgage applicants are usually inclined to the fixed-rate deals. It is a beneficial deal but not in the longer run. Here again, the concern of fee rises. Some finance companies may look desperate to charge more. At that time, the warning sign of fee up to £2,500 should send a wakeup call. It is necessary because even the big names of the industry are under the pressure of the dull market. See here how Santander is in the news due to its retrench because of a price war: https://on.ft.com/2NLo9tX

In case, if further fall in the rate happens, the borrower may miss having a high chance of the smaller instalments. The better strategy is to let the rate part act volatile. If the circumstances get even better, at least, opportunities can be explored.

Already with ubiquitous and sleepy nature of the mortgage rates, the current situations may stay for a long time. The homebuyers need to understand the direction of the wave to get a lucrative deal.

What role can brokers play in the scenario?

It is a perfect question to ask. When there is a threat of being tricked by some lenders through high fee, brokers can act as the saviours. They can help the applicants find a genuine mortgage provider that is ethical in its practices. 

The market has many brokerage companies like ShineMortgages, Dual mortgage brokers, Just mortgage brokers etc.

The significant benefits that can borrowers get from brokers are -

• They know every nook and cranny of the market.

• Many lenders and applicants come on their platform; they know which deal match to whom.

• Fund seekers can know about the latest changes in the industry.

• They can inform the homebuyers about the tactics that the lenders use to charge a more substantial amount in the fee.

Conclusion

With the above circumstances in the home loan market, it is necessary to be alert. The lending offers are lower in the interest rate, but the fee structure affects the overall cost. Research can be the best tool to know what is wrong and what is right.